LLQP Segregated Funds & Annuities · Component 2.4 · 30% of the exam
A group plan member asks whether he can name his sister as beneficiary of his group savings plan. The agent should explain that:
- Aonly a spouse or a dependent child may ever be named on a retirement arrangement in Canada
- Bthe employer selects the beneficiary for every member from the records it holds on file
- a designation is usually permitted, though spousal entitlements may apply to pension money
- Dgroup plans do not permit beneficiary designations of any kind under any circumstances
Correct answer: C) a designation is usually permitted, though spousal entitlements may apply to pension money
Members can normally name a beneficiary on a group savings plan. Where pension legislation applies, a surviving spouse often has a statutory entitlement that takes priority unless it has been waived in the prescribed form.
Why the other options are wrong
- AOther individuals may be named, subject to any spousal entitlement that applies.
- BThe member chooses the beneficiary, not the employer.
- DDesignations are a standard feature of group savings arrangements.
Exam tip
Savings plan equals free choice; pension money equals check the spousal entitlement first.
Common mistake
Applying savings plan designation rules to locked-in pension entitlements.
What this tests
CISRO competency component 2.4 — Analyze the available products that meet the client's needs — which is weighted at 30% of the Segregated Funds & Annuities module. Written against the published curriculum.
More from component 2
- A segregated fund's 'guaranteed amount' after a partial withdrawal under proportional reduction is:
- A distinctive estate advantage of a segregated fund over a non-registered mutual fund held jointly with a child is:
- Segregated fund guarantees are most valuable relative to their cost when:
- A segregated fund's annual statement reports:
- Compared with a segregated fund, an exchange-traded fund (ETF) generally offers:
- A segregated fund's 'automatic death benefit reset' feature:
Practice the whole Segregated Funds & Annuities module
Timed sets weighted like the exam, and review of every question you miss. Free to start.